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EU Increasingly at Odds with Microsoft Compliance

If there was any doubt whether antitrust regulators in Europe were going to roll over as their American compatriots did when facing off against Microsoft, set them to rest. This week, the European Union (EU) sent clear signals that it would strictly enforce its antitrust ruling against Microsoft and not let the company slide by on technicalities as it did so often in its early US fracas.

At issue this week is Microsoft's compliance with the antitrust ruling. Specifically, Microsoft is required to issue a new Windows version that does not include Windows Media Player and make technical information about its server products available to its competitors. In both instances, EU regulators have found fault with Microsoft's compliance of both provisions. And they're getting ready to levy massive daily fines against the software giant if it doesn't shape up.

Regarding the new Windows version, Microsoft had previously tried to work around the spirit of the ruling by naming the product Windows XP Reduced Media Edition. But EU regulators argued that that name made the product less appealing to potential customers, and therefore violated the terms of the ruling. They required Microsoft to come up with other possible names for the product.

This week, the situation became even tenser when a review by Microsoft's competitors revealed that the new Windows version lacks key registry entrees that make it possible for third party media players like Apple iTunes and RealNetworks RealPlayer to function properly. Microsoft confirmed the problem, but stated that it was the result of the EU requirements and there wasn't much the company could do to fix the problem. According to Microsoft, over 185 files had to be removed from Windows in order to completely exorcise Windows Media Player. Somewhere, Judge Thomas Penfield Jackson is rolling his eyes knowingly.

The EU reaction to this news was swift. "The \[European Commission\] is still in the process of assessing ... whether Microsoft is complying properly with the requirement to offer a fully functioning version of Windows without Media Player," said an EU spokesperson. "In particular, the commission has to verify the requirement that Microsoft refrain from using any commercial, technological or contractual terms that would have the effect of rendering the unbundled version of Windows less attractive or less functional."

And last week, the EU determined that Microsoft's compliance with the server technology information distribution was also unacceptable after examining a complaint by the Free Software Foundation (FSF), which complained that Microsoft's licensing terms were too expensive. Microsoft was planning to charge licensees as much as $600 per server for its server protocols, a cost that the EU said was much too high and doesn't comply with the spirit of the ruling. Seeing a trend yet?

Finally, the EU has also rejected a Microsoft proposal to appoint a non-partisan trustee who would oversee the company's compliance with its EU antitrust ruling. "We have officially informed Microsoft that their proposal on the monitoring trustee is not acceptable," an EU spokesperson said. "Essentially they wished to have a veto on what issues the monitoring trustee could examine." The EU has given Microsoft 10 days to respond to this particular issue. If the software giant declines, the EU will impose its own monitoring system to ensure that Microsoft complies. So far, the company hasn't been doing a great job of that, according to the EU.

What this all adds up to is a steadily declining relationship between Microsoft and the latest regulatory body to find issue with its business practices. Microsoft continues to pledge that will work closely with the EU to resolve the differences and meet the requirements of the antitrust ruling. And yes, this kind of talk stands in sharp contrast to Microsoft's public statements during the US antitrust case. But the company's actual behavior now is far closer to its behavior then. And in cases such as this, deeds will surely affect the outcome more than words.

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